Telkom profit slumps 92%

Johannesburg - Telkom [JSE:TKG], South Africa's struggling telephone operator, posted a 92% decline in full-year profit on Monday, hit by higher operational costs at home and tough competition at its Nigerian unit.

Africa's largest fixed-line operator said headline earnings per share totalled 46.8c in the year to end-March, compared with 610.5c a year earlier.

Headline earnings, which strip out certain one-time items, are the main measure of earnings in South Africa.

Revenue totalled R37.03bn ($4.92bn) versus R36.8bn a year earlier.

The results were widely expected after the company said last month it expected earnings to fall by between 80% and 100%.

The company has been hit after selling its stake in mobile-phone operator Vodacom Group [JSE:VOD], a major profit driver, last year.

Telkom now wants to expand its own mobile-phone business, but faces stiff competition from established players such as MTN Group [JSE:MTN] and smaller firm Cell C.

Chief Executive Reuben September, who has led the company for the past three years, is due to step down in autumn, leaving an uncertain future for the mobile-phone operation.

Shares of Telkom are down about 1.5 percent so far this year, underperforming a 0.3 percent advance in Johannesburg's all-share index.

- Reuters